股票期货突破技术分析(英文原版)-第6部分

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more　sophisticated　definitions　of　flow　using　range；　position　of　close　relative　to　the　high　and　low；　progress。through　the　envelope　system；　and　advance/decline　measures。　But　the　bottom　line　is。how　the　shorter　time　period　handles。resistance　and　support；　if　the　weekly。and　monthly　consistently　break。resistance　and　hold　nearby　support；　then　the　quarterly　and　yearly　bars。are　headed　up；　and　the　quarterly　and　yearly　upside　targets。should　be　kept　in　sight。　

The　world　is。a　plicated　place。　Huge　geopolitical　forces。shape　the　global　currency　markets。　Exchange…rate　charts。are　the　graphic。reflection　of　massive　changes。as。the　fortunes。of　countries。and　peoples。rise　and　fall。　When　major　shifts。occur—changes。in　interest　rate　policies；　wars；　shifts。in　national　priorities；　or　changes　in　regimes—the　relative　values。of　the　currencies。of　different　countries。can　be　on　the　move　in　a　major　trend　for　a　significant　period　of　time。　Although　it's。not　possible　for　the　individual　trader　to　know　or　understand　all　possible　fundamental　information；　it　is。possible　to　make　reasonable　predictions。about　the　extremes。of　yearly。price　action；　to　monitor　those　assumptions；　and　to　trade　them　successfully；　picking　off　the　yearly　highs。and　lows。and　thus。preserving　capital　or　building　wealth；　depending　on　your　goals。　
Trading　is。a　difficult　business。　It　requires。both　on…target　perceptions。and　mental　strength。　First　you　have　to　see　the　opportunity。　Then　you　have　to　take　the　opportunity。　You　have　to　stick。with　your　decisions。through　thick。and　thin　as。you　monitor　the　trade；　knowing　exactly　what　has。to　happen　if　you　are　wrong　and　what　has。to　happen　if　you　are　right。　
Trading　the　Forex　with　an　eye　on　long…term　Drummond　Geometry　charts。can　help　the　trader　keep　the　market　in　context　and　withstand　the　many　wide　countertrend　oscillations。that　will　shake　out　the　trader　who　is。not　equipped　with　the　long…term　perspective　that　yearly　and　quarterly　charts。provide。　Seeing　the　yearly　bar　develop　lets　the　trader　watch　the　background；　not　just　focus。on　the　foreground。　To　be　better　than　the　rest　in　trading；　as。in　so　many　fields；　we　have　to　do　something　different　from　the　rest。　In　trading　the　global　currency。markets；　one　tool　that　can　make　a　real　difference　is。a　careful　analysis　of　the　big　picture；　using　the　multiple　time　period　analysis。of　Drummond　Geometry。　

CHAPTER　2　


Trend　Spotting　With　TD　bo　
TOM　DeMARK　
Most　traders。are　trend　followers。　They　accept　the　widespread　belief　that　the　trend　is。a　trader's。friend。　Many　years。of　exhaustive　research　and　trading　experience　have　convinced　us。that　this。notion　is。flawed。　For　the　sake　of　pleteness；　we　have　added　a　corollary　to　this。premise—the　trend　is。your　friend；　unless　the　trend　is。about　to　end。　
Human　nature　is。such　that　we　are　inclined　to　extrapolate　current　events。into　the　future。　Some　expectations。have　outes。that　are　immutable　and　universally　applicable：　The　sun　rises。in　the　morning　and　sets。in　the　evening。　Cut　your　hand　with　a　knife　and　you　will　bleed。　Fall　from　an　elevated　level　and　gravity　will　pull　you　down。　There　are　no　exceptions。　Other　expectations。may　be　disappointed：　Flip　a　light　switch　and　a　dark。room　bees。bright—but　what　happens。if　the　electricity　is。not　in　service？　
Similarly；　in　terms　of　trading　markets；　as　long　as。buying　pressure　is　greater　than　selling　pressure；　a　market's。trend　is。up；　and；　conversely；　as。long　as。selling　pressure　is。greater　than　buying　pressure；　a　market's。trend　is。down。　To　expect　that　buying　pressure　will　continue　to　exceed　selling　pressure　and　extend　an　uptrend　indefinitely　or　that　selling　pressure　will　continue　to　exceed　buying　pressure　and　extend　a　downtrend　indefinitely　is。foolhardy。　No　market　trend　continues。forever；　just　as。no　tree　grows。to　the　sky。　Market　dynamics。are　not　dictated　by　the　forces。that　govern　human　nature。　Most　traders。are　content　to　trade　fort…ably　and　with　a　trend；　but　what　happens。when　buying　and　selling　pressure　move　into　equilibrium　or　when　buying　pressure　overes。selling　pressure　or　when　selling　pressure　overes。buying　pressure？　During　these　transition　periods。of　buying　and　selling　pressure；　market　fundamentals；　news；　and　expectations。usually　remain　intact。　However；　under　this。veneer；　the　supply/demand　dynamics。are　in　fact　being　redefined。　Maintaining　a　trading　edge　by　anticipating　these　internal　market　changes。is。imperative　to　ensuring　a　trader's。good　mental　and　financial　health。　
Opposing　the　Marketplace　
Contrary　to　the　widely。accepted　notion　that　markets　bottom　due　to　smart；　informed　buyers。having　inside　information　and　therefore　accumulating　positions。prior　to　a　rally；　our　research　has。shown　that　markets。reverse　a　downtrend　because　of　a　lack。of　selling；　and　by。default　price　moves。sideways。or　higher。　Similarly；　a　market　top　is。not　produced　by　savvy　sellers。learning　of　negative　news。prior　to　a　decline　and　then　coordinating　their　efforts。and　forcing　price　down。　Rather；　price　peaks。are　made　when　the　number　of　buyers。diminishes　and　eventually　disappears；　and　by　default　price　moves。sideways。and　then　down。　At　these　junctures；　unless。the　pool　of　buyers。or　sellers。increases；　the　lack。of　intensity　creates。a　trend　change。　To　extend　or　regenerate　a　trend；　it　is。necessary　for　an　entirely　new　pool　of　buyers　in　an　uptrend　and　sellers。in　a　down　trend　to　emerge。　In　other　words；　the　fundamentals。that　dictate　and　define　long…term　price　movements。must　be　sufficiently　attractive　to　entice　a　new　group　of　adherents。willing　to　mit　funds。to　their　beliefs。　Trading　the　markets。is。not　a　game　of　lip　service。　Regardless。of　how　vocal　you　may　be　in　professing　your　market　forecast　or　how　convincing　your　arguments；　the　litmus　test　and　the　determinant　of　price　movement　is　money。　
It　is。human　nature　to　seek。approval　for　one's。actions。　This。is。ingrained　in　most。　To　contradict　the　majority　is。socially　unacceptable。　You　risk。being　ostracized　if　you　fail　to　conform　to　the　rules。and　the　values。of　society。　Unfortunately；　such　behavior　does。not　necessarily　serve　you　well　when　trading　the　markets。　
Having　been　involved　exclusively　with　large　financial　institutions。for　more　than　thirty…five　years；　we　know　it's。impossible　for　them　to　mit　significant　amounts。of　funds。after　a　trend　has。been　established。　The　petition　is。too　intense　and　too　many　price　concessions　have　to　be　made。　Consequently；　we　had　to　be　prepared　to　anticipate　trend　changes。　In　other　words；　we　had　to　oppose　the　psychology　of　the　marketplace　and　be　prepared　to　buy。weakness。and　sell　strength。　It　was。often　difficult　given　the　overall　sentiment。　But　it　was。the　only　way　to　make　large…scale　mitments　and　to　do　so　at　propitious。price　levels。　Trading　discipline　and　objectivity　were　essential　to　thisunterintuitive　approach。　TD　Sequential　was。the　first　trading　method　developed　to　acplish　this。goal。　TD　bo　is。a　related　approach　with　more　requirements。and　greater　precision。　
Markets。advance　and　decline　in　a　natural　price　rhythm　that　is。often　definable。　Although　the　market　does。not　alwaysnform　to　this。price　pattern　prescription；　even　when　it　deviates；　the　price　pattern　is。still　valuable　because　it　forces。a　trader　to　buy　into　price　weakness。and　to　sell　into　price　strength。　

Determining　Market　Direction　

Before　mitting　to　a　trade；　you　must　define　the　market　environment。　Is。the　market　vulnerable　to　an　advance　or　to　a　decline；　or　is　it　locked　into　a　trading　ranger。　Much　research　and　analysis。have　shown　that　a　simple　basic。mathematical　exercise；　which　we　call　TD　Setup；　will　provide　a　clue　to　whether　the　market　is　likely　to　rally　or　decline。　By　paring　the　market's。close　on　the　current　price　bar　with　the　close　four　price　bars。earlier　and　then　recording　a　series　of　similar　consecutive　price…parison　closes；　one　can　draw　highly　probable　conclusions　regarding　future　price　behavior。　Specifically；　by　recording　nine　consecutive　closes。lower　than　the　close　four　price　bars。earlier；　a　buy　setup　is。formed；　and　by　recording　nine　consecutive　closes。higher　than　the　close　four　price　bars。earlier；　a　sell　setup　is。formed。　Often；　the　pletion　of　these　TD　Setup　series。is。associated　with　minor　areas。of　price　exhaustion—particularly　when　the　TD　Setups。are　properly　price　“perfected”。　Specifically；　for　a　TD　Buy　Setup　to　be　perfected　and　qualified　for　a　short…term　rally；　either　the　low　of　buy　setup　price　bar　eight　or　the　low　of　buy　setup　price　bar　nine　must　be　lower　than　both　lows。of　buy　price　bars。six　and　seven。　If　neither　price　bar　eight's。nor　price　bar　nine's。low　meets。this。requirement；　then　you　must　await　the　first　subsequent　low　that　fulfills。this。requirement　before　the　price　〃perfection〃　is。met。　Figure　2。1　illustrates　just　such　a　deferral。　Note　in　Figure　2。1　that　once　a　low　was。recorded　that　exceeded　the　lows。of　TD　Buy　Setup　price　bars。six　and　seven；　the　market　experienced　an　advance　of　a　few　trading　days。　
Conversely；　in　Figure　2。2；　once　a　high　was。recorded　that　exceeded　the　highs。of　TD　Sell　Setup　price　bars。six　and　seven；　the　market　experienced　a　decline　of　a　few　trading　days；　Granted；　TD　Setup　price　perfections。are　often　preludes。to　speculative　trades。of　an　indeterminable　duration；　nevertheless；　their　value　may　be　to　forewarn　of　a　likely　interruption　of　an　ongoing　trend。　

Once　the　minimum　requirement　of　nine　consecutive　closes。lower　than　the　close　four　price　bars。earlier　is。recorded；　the　TD　Buy　Setup　is　plete。　Similarly；　once　the　minimum　requirement　of　nine　consecutive　closes。higher　than　the　close　four　price　bars。earlier　is　recorded；　the　TD　Sell　Setup　isplete。　These　setups。serve　to　provide　the　trader　with　the　market's。likely　trading　environment。　Most　often　they　are　preambles。to　countdown　series　that；　once　pleted；　identify　zones。of　price…trend　exhaustion。　TD　bo　is。designed　to　select　only　those　price　bars。of　relevance　and　to　ignore　those　that　fail　to　adhere　to　rigid　selection　criteria　regarding　price　relationships。　Specifically；　it）　addition　to　the　setup　phase；　a　subsequent　and　more　onerous。process。is。followed。　

The　Buy　or　Sell　Countdown　
Once　a　TD　Buy　Setup　of　nine　consecutive　closes。lower　than　the　close　four　price　bars　earlier　is。recorded；　the　buy　countdown　process。begins。by　referring　back。to　the　first　price　bar　of　the　buy　setup　and　making　the　following　parisons：　
1。　
The　close　of　that　price　bar　must　be　lower　than　or　equal　to　the　price　bar's。low　two　price　bars。earlier。